Mary Jo White: Good Cop or Bad Cop for Wall Street?

WASHINGTON, DC - JANUARY 24: President Obama nominating Mary Jo White to become the new chairman of Securities and Exchange Commission and re-nominating Richard Cordray to head the Consumer Financial Protection Bureau . (Getty Images via @daylife)

As with all new nominees, I'm willing to give Mary Jo White the benefit of a doubt as she prepares to take over the helm of the trouble Securities and Exchange Commission (SEC).

The former prosecutor may have an impeccable record of putting bad guys in jail, but how will she regard megabankers who have thus far eluded prosecution?

She'd be ahead of the game if she is able to develop an early warning system to detect meltdowns, Madoffs and MF Globals before they happen. That would be a major achievement.

Right now, though, if confirmed, she'll have a lot on her plate. The agency is sitting on two extremely important rules for individual investors: Crowdfunding (JOBS Act) and fiduciary duty (Dodd-Frank). The former may protect small investors from getting fleeced. The latter would make brokers legally accountable to their clients.

If White can become a true investor protection advocate, she has my vote. While I'm doubtful that she alone can prevent another Wall Street-fueled meltdown, she can at least look out for the little guy. Here are some particulars on her, courtesy of The Fiscal Times:

1.) Even George W. Bush liked her – Bill Clinton named White as the U.S. attorney in 1993, but the Bush administration asked her to remain at the post for an extra year.

She stayed nine years in the post, after having worked as an assistant attorney in the Manhattan-based district from 1978 to 1981 and again from 1990 to 1993.

2.) She has an M.A. in psychology – White earned her degree in 1971 from the New School for Social Research, a year after graduating from the College of William & Mary in Williamsburg, Va. She went on to attend law school at Columbia University.

3.) Her husband is an SEC insider – John White served as the commission’s director of corporate finance from 2006 to 2008. As a partner at the firm Cravath, Swaine & Moore, he co-authored an article in December noting that the implementation of new rules regulating derivatives “may be delayed.”

4.) Lots of other Wall Street connections – She served on the board of directors for the Nasdaq stock exchange. In her current job at as a partner at Debevoise & Plimpton, she defended former Bank of America CEO Ken Lewis on charges of civil security fraud.

5.) That Plimpton in her law firm’s name? George Plimpton’s dad – Francis Plimpton joined the firm in 1933 and was the father of the literary bon vivant who founded The Paris Review, quarterbacked for the Detroit Lions, and boxed against Sugar Ray Robinson.

6.) She jailed mobster John Gotti – The boss of New York’s Gambino crime family was convicted in 1992 of racketeering, tax evasion, bribery, loansharking, and his involvement in several murders. White was the government’s lead prosecutor who finally put the “Teflon Don” behind bars.

7.) She took on terrorists –White prosecuted the notorious “Blind Sheikh” Omar Abdel Rahman and Ramzi Ahmed Youzef who were behind the 1993 World Trade Center bombing. In 1998, her office indicted Osama bin-Laden for his attacks on U.S. embassies.

8.) In 2002, she worried about the government arresting too many top executives – “Arresting executives is a way that the government tries to prove it means what it says in terms of cracking down,” White told The New York Times in 2002. “The danger, of course -- and it's a significant one -- is overkill, sweeping into the prosecutorial frenzy people who should not be charged.”

9.) She challenged the New Orleans Saints – The NFL had White review evidence that New Orleans Saints’ defensive players were paid bounties to injure players on opposing teams, The New York Times reported in June.

10.) She also beat Donald Trump—In private practice, she successfully defended a journalist who wrote that Trump was not actually a billionaire, according to the Columbia Law School Magazine.

Anyone who put the "Dapper Don" John Gotti in jail, beat Trump and convicted terrorists is off and running for a job that involves policing the thieves' den known as high finance. She might have to bone up on structured products, derivatives and high-frequency trading to get the lay of the land, though. It's a steep learning curve, but one that she might relish.

I speak and write about innovation, investor protection, money management, economics, college financing, retirement and social issues. My latest book is "Lightning Strikes: Timeless Lessons in Creativity from the Life and Work of Nikola Tesla," a revealing look at the disrup...